Sangfor Technologies (SZ:300454) Xinda Securities·2024-04-10 16:00Investment Rating - The report assigns a rating of "Hold" for the company, indicating that the stock price is expected to fluctuate within ±5% of the benchmark [8]. Core Views - The company's revenue in 2023 was 7.662 billion, a year-on-year increase of 3.36%, with a net profit attributable to shareholders of 198 million, reflecting a growth of 1.89% [1][3]. - The overall revenue is under pressure, but the gross margin for core products has improved, with an overall gross margin of 65.13%, up by 1.31 percentage points from the previous year [1][3]. - The company is experiencing cautious spending from downstream clients, particularly in the government and financial sectors, which has led to revenue pressure [1][3]. Financial Performance Summary - In 2023, the company's network security business generated revenue of 3.892 billion, a slight decline of 0.14%, while the cloud computing and IT infrastructure business saw revenue growth of 8.07%, reaching 3.090 billion [1][3]. - The company reported a net operating cash flow of 9.47 billion, a significant increase of 26.97% year-on-year, indicating strong cash generation capabilities [1]. - The company has maintained a high R&D investment, exceeding 20% for eight consecutive years, focusing on AI technology integration across its products [1][2]. Earnings Forecast - The earnings per share (EPS) for 2024-2026 are projected to be 0.69, 0.94, and 1.25 respectively, with corresponding price-to-earnings (P/E) ratios of 82.27, 61.11, and 45.59 [2][3].